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Tax plan is best delayed

Published: Tuesday, April 9, 2013 at 3:16 p.m.

Last Modified: Tuesday, April 9, 2013 at 3:16 p.m.

Gov. Bobby Jindal and his advisers spent weeks making the argument that the state was in dire need of a dramatic tax swap that would do away with corporate and personal income taxes in favor of expanded and increased sales taxes.

Although the message was strong, it failed to make a compelling case for the governor’s tax swap plan.

On Monday, when Jindal addressed the new session of the Legislature, he admitted as much, saying he was going to “park” the plan for this year. He did keep the broad plan alive by urging legislators to work toward a repeal of the income taxes and to send him a plan for doing so.

It would be better for the governor, his administration and his legislative allies to spend more time coming up with a better-thought-out, more palatable plan that can be introduced at a later date.

Jindal’s team spent months compiling data and working diligently to make sure the swap would be revenue-neutral, resulting in the same amount of revenue the state currently gets.

That was a laudable goal and one that needs to remain part of the overall effort.

Unfortunately, even with the considerable work that was done, Jindal’s plan had some weaknesses.

There was widespread concern that shifting the tax burden toward sales tax would result in a disproportionate burden being placed on those who are poor or living on fixed incomes.

There was also a lot of dispute about the accuracy or general reliability of all the numbers the team used.

And there was a belief that the swap could shift a significant tax burden onto the state’s businesses.

Those concerns remain, and they are most likely to be resolved outside of the rushed process of the current legislative session, particularly when lawmakers would essentially be starting from scratch.

As the revenue-neutral aspect of the plan is essential for the long-term stability of the state’s finances, it would be best to leave the plan for the future.

Passing part of it, such as the income tax repeal, could be dangerous if it does not go hand in hand with a reliably calculated plan to offset the loss of revenue.

It is much better for the entire plan to be formulated, debated and adjusted together rather than proposed piecemeal during the legislative session, where the political support for doing away with taxes might outdo the support of a tax plan to make up the difference.

The governor deserves credit for proposing an ambitious plan, and the plan should not be ignored or forgotten. However, going forward with parts of it is not the way to go.

Going back to the drawing board is a preferable approach at this point.

<p>Gov. Bobby Jindal and his advisers spent weeks making the argument that the state was in dire need of a dramatic tax swap that would do away with corporate and personal income taxes in favor of expanded and increased sales taxes.</p><p>Although the message was strong, it failed to make a compelling case for the governor's tax swap plan.</p><p>On Monday, when Jindal addressed the new session of the Legislature, he admitted as much, saying he was going to “park” the plan for this year. He did keep the broad plan alive by urging legislators to work toward a repeal of the income taxes and to send him a plan for doing so.</p><p>It would be better for the governor, his administration and his legislative allies to spend more time coming up with a better-thought-out, more palatable plan that can be introduced at a later date.</p><p>Jindal's team spent months compiling data and working diligently to make sure the swap would be revenue-neutral, resulting in the same amount of revenue the state currently gets.</p><p>That was a laudable goal and one that needs to remain part of the overall effort.</p><p>Unfortunately, even with the considerable work that was done, Jindal's plan had some weaknesses.</p><p>There was widespread concern that shifting the tax burden toward sales tax would result in a disproportionate burden being placed on those who are poor or living on fixed incomes.</p><p>There was also a lot of dispute about the accuracy or general reliability of all the numbers the team used.</p><p>And there was a belief that the swap could shift a significant tax burden onto the state's businesses.</p><p>Those concerns remain, and they are most likely to be resolved outside of the rushed process of the current legislative session, particularly when lawmakers would essentially be starting from scratch.</p><p>As the revenue-neutral aspect of the plan is essential for the long-term stability of the state's finances, it would be best to leave the plan for the future.</p><p>Passing part of it, such as the income tax repeal, could be dangerous if it does not go hand in hand with a reliably calculated plan to offset the loss of revenue.</p><p>It is much better for the entire plan to be formulated, debated and adjusted together rather than proposed piecemeal during the legislative session, where the political support for doing away with taxes might outdo the support of a tax plan to make up the difference.</p><p>The governor deserves credit for proposing an ambitious plan, and the plan should not be ignored or forgotten. However, going forward with parts of it is not the way to go.</p><p>Going back to the drawing board is a preferable approach at this point.</p><p>Editorials represent the opinions of</p><p>the newspaper, not of any individual.</p>